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MBTA's CharlieCard Goes Mobile

As is becoming clearer every day, merchants of all kinds are anxious to avoid any new hard dollar costs when it comes to payments. Given that, merchants are delighted with the idea of leveraging the consumer’s investment in expensive smartphones as a way to kick off a payment or commerce transaction. While we wait to see if a ubiquitous mobile payment method emerges on NFC wings, we are seeing growth in context-specific apps designed for an optimum experience in a particular location.

Transit, particularly light and heavy rail ticketing, is a high volume context. Rail ticketing has always been a challenge as many rail stations do not have gates, turnstiles, or even payment capabilities. The commuter rail system that terminates at two Boston train stations is a perfect example which explains recent news regarding the Masschusetts Bay Transportation Authority (MBTA) and ticketing vendor Masabi and their plans to offer mobile ticketing.

The MBTA, like other transit systems, has looked at smartcard-based schemes. While offering many advantages, the downside, particularly in the comparatively unstructured light rail environment, is the cost of deploying so many ticket readers and issuing the contactless cards.

Masabi has brought a barcode-based scheme that displays a dynamic barcode that includes color and watermarking. For a quick check, the conductor on the train can glance at a rider’s screen to make sure it is displaying the right color or she can scan the screen to gather more payment data. The project will enter beta testing in the late summer and is expected to go live in the fall of 2012.

Putting those expensive smartphones to use, purchased on someone else’s dime, sure can make a merchant happy. While transit operators have rarely been accused of being early adopters, Boston now joins Salt Lake City in that group of mobile payments in transit technology pioneers.

This from a Wall Street Journal article on the release and interview with Ben Whitaker, CEO of Masabi:

He said Boston had been trying to roll out its smart-card system, but it is very expensive. “You are making a huge bet. You have to roll out the hardware to every station on day 1. You need terminals with comms everywhere around you system. With a mobile side it is a bit more like a traditional paper ticket. You buy your ticket for a given day. Even if a guard does not check you, you have used your ticket for that day.”

Masabi’s barcode system has multiple levels of security to prevent fraud and let inspectors to check the validity of a ticket. The ticket has an animated watermark with a dynamic color background that allows an inspector to do a quick check, much like an inspection today, without having to scan each ticket.

“The color sequence is cryptographically generated. The guards have their own applications on their phones which they can check when they enter a carriage. That will tell them what colors they should see. Even if someone has videoed an entire day, the sequence changes from day-to-day, they are not going to know what the colors should be.”

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